The Meaning of Money - Hartley Withers

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1916 edition. Excerpt: ...very confusing, for on the Stock Exchange, when they talk of a firm market, they mean one in which there is a strong demand for the securities handled by it and a consequent rise in prices. When the Consols market is firm Consols go up, when the discount market is firm bills go down, which is only another way of saying that discount, which is the commodity in which the market really deals, goes up. All this is very platitudinous, but I have known an occasion on which a financial journalist was taken to task, by a man of high standing in the City, for stating in his money article that the discount market was weak, with easier rates, owing to the scarcity of bills. In this case a practical banker of many years' experience had fallen into this trap, so that I must be excused for giving a considerable amount of space to the endeavour to warn less well-informed inquirers against it. A moment's thought shows that when bills are scarce and in demand, buyers who want them will have to take them at lower rates, that is, at higher prices, so that the newspaper statement objected to was perfectly correct. Having done our best to put a fence round this tiresome pitfall, let us return to our bill-broker, who is still wondering whether to buy a parcel of three months' bills at 4 per cent. in the last week of June, and let us examine a few of the principal factors that will determine his decision. In the first place he has to consider the immediate circumstances of the market and the prospect of his being able to resell the bills forthwith at a profit, L or to finance them comfortably if he be obliged to retain them. The last week of June is a most unencouraging period from this point of view. The close of the two halves of the year are habitually...